Only three education authorities will be taking part in the nursery voucher scheme next spring, education junior minister Robin Squire admitted to MPs this week.
He said he was "dismayed" that only the London boroughs of Kensington and Chelsea, Wandsworth, and Westminster would be accepting vouchers from parents of four-year-olds in the first phase of the national scheme.
Afterwards, Labour education spokesman David Blunkett reminded the Government it had promised "a dozen" local education authorities would agree to pilot the scheme from next April, before it goes nationwide in 1997.
While the Government has so far signed up only three LEAs, two others, Tory-controlled Buckinghamshire and Norfolk, where no party has overall control, could join if they receive certain assurances from the Department for Education and Employment.
Mr Squire faced heckling from some MPs when, after admitting his disappointment, he sought to blame some LEAs for putting political dogma before parental choice. He claimed the DFEE had received many letters from parents who wanted to know why their LEA was not taking part in the scheme.
Mr Squire's announcement follows weeks of speculation that the Government was having difficulty meeting its target. He told delegates at the Professional Association of Teachers' conference in July that 12 authorities were discussing vouchers.
But by July 31, only Wands-worth and Buckinghamshire had formally applied. Mr Squire told the PAT that the deadline would not be extended, but by August his department was saying authorities could expect some flexibility.
Mr Blunkett said after the Commons debate: "Gillian Shephard has failed the test on nursery vouchers. She had promised a dozen pilots, yet even after considerable arm-twisting only three have been confirmed, and ministers have still not found a private agency to administer the scheme. It has degenerated into confusion and farce. The figures and explanations have been drawn up on the back of an envelope.
"Authorities with a lot of nursery places are finding they will lose out because they are penalised for spending above the standard spending assessment (the Government's estimate of how much money it thinks an authority should spend), yet authorities with very little would be rewarded."
Buckinghamshire has deferred its decision on joining the scheme until November 30, when it hopes to have more information from the DFEE and from its primary and nursery headteachers.
It is still worried about the impact on existing nursery education. Some heads, for example, fear their nurseries may no longer be viable if too many parents choose to spend their vouchers elsewhere.
And Buckinghamshire, like Norfolk, is also anxious for a "get-out clause" whereby it can pull out of the first phase if necessary.
Norfolk, which is run by Labour and the Liberal Democrats, will not decide on signing up until its full council meeting on October 30.
Michael Edwards, Norfolk's county education officer, said: "The financial calculations which relate to phase one are key issues. It is very important it is calculated absolutely scrupulously fairly and not against the interests of the participants, and it should not be subject to huge change when phase two comes in."
The Government will shortly name the agency to run the scheme. A DFEE spokesman said it had no plans to publish a consultation document on financial details. The department had already consulted LEAs informally, he said, and it would be up to the voucher company to publish practical details.
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